Their lordships take aim in the battle to bend the Bill

The upper house stands between the Government and its many plans to shake up the media industry. Heather Tomlinson takes her seat for the show

Sunday 9 March 2003 00:00 BST

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From TV reports about party politics to interviews with parliamentary candidates in the local rag, MPs couldn't get elected without the media.

From TV reports about party politics to interviews with parliamentary candidates in the local rag, MPs couldn't get elected without the media.

So it is not surprising that Tessa Jowell's planned shake-up of the media industry is receiving a bit more attention from Parliament than, say, moves to stop dogs fouling the pavement. The Communications Bill has now passed through the House of Commons after a gruelling inspection last year by a committee of MPs and a debate in Parliament. A short breathing space followed, then, last week, the Bill was passed to the House of Lords. The end of this month sees the Bill's second reading, after which it could get the green light – but the process is likely to be bloody.

There is a wide range of opinion about the Bill in the Lords. None of the truly contentious issues has yet to be resolved, despite scrutiny from a cross-party committee of peers and MPs. Even before the Bill was conceived, the Government had consultations with the media industry, and there has been vigorous lobbying ever since.

Those batting for the British film industry will be happy with an amendment to the Bill to force broadcasters to support UK-based films – guaranteeing more screenings and more revenue. "British broadcasters will have to show more British feature films and invest more heavily in home-grown films," says Parmjit Dhanda, the Labour MP who introduced the change. "It should bring through the next generation of Bend It Like Beckhams." The amended Bill will also introduce quotas forcing TV companies to give commissions to the struggling independent production companies.

But so far, the thorniest issues have not been resolved by the Commons. Most controversial of these is the question of who will be allowed to own Channel 5 and ITV. The proposed legislation says two things: that non-EU companies (read American) can own ITV and that significant newspaper proprietors (read Rupert Murdoch) can own Channel 5. At the moment, both scenarios would be outlawed.

The opposition's viewpoint is best summarised by one of the chief ringleaders, the Liberal Democrat peer Lord McNally. "There is a lot of concern that we are taking on face value the belief that there will be better management and more investment via American ownership," he says. "I suspect the Lords will be highly sceptical of whether this is in the public interest. There will be a fair old debate about that."

MPs had been eager to chew over the issues in Parliament and at the committee stage, but were disappointed. In Parliament the guillotine came down on the debate, while the MP proposing the amendment before the committee fell victim to the vagaries of London Transport and didn't make it in time for the kick-off.

However, in the Lords there is no such guillotine. The House can debate for as long as it likes, which should please the Tory peers, led by Baroness Buscombe, and the Labour rebels, personified by former Chariots of Fire producer Lord Puttnam. As Lord McNally says: "I think it will get a fairly lengthy going over." The two lords were on the original cross-parliamentary committee that scrutinised the Bill, and are well acquainted with its fine detail.

Realising that there has been little debate in the Commons, and that the Bill will soon be surfacing in the less obedient Lords, the Government has already amended the legislation to allay fears. If control of either ITV or Channel 5 were to change, Ofcom, the new media "super" regulator, would now be able to step in – for example, by increasing the output of public service programmes on news, religion and current affairs.

However, this is unlikely to be enough for some. "I think it's better to keep a diversity of ownership," says Lord McNally. "It is not just a matter of building in public service responsibilities. The question is whether any concentration of media ownership to that degree is unhealthy."

The Government has not backed down on these points, and is unlikely to do so now. It will be for the Conservative, Liberal and cross-bench peers to decide whether they want a fight. But some industry-watchers point out that many peers are economic liberals and could agree with the Government's decision to free up companies who might want to bid. "I wonder how much support there will be in the Lords," says Paul Stone, a competition lawyer at Lovells. "For the Conservatives, that measure is deregulatory so they will probably support [the Government]."

On a separate issue, the Conservatives are likely to find themselves on the losing side. The party wants the publicly-funded BBC to be fully regulated by Ofcom, just like the commercial broadcasters. At the moment it is the job of the BBC governors to regulate the organisation. But John Whittingdale, the shadow Culture Secretary, says its behaviour towards commercial broadcasters merits the imposition of an independent eye. However, the BBC remains close to the heart of many more left-wing Lords, and Mr Whittingdale concedes that the status quo is unlikely to change.

Yet their lordships might still join forces and impel the Government to make serious changes to the Bill. They could, for example, force the BBC to hand over its books to the National Audit Office, to decide whether public money is being wasted. They could also change the rules regarding the shared ownership of ITN, which provides a news service for ITV and Channels 4 and 5. Since it has to to compete against BBC News 24 and Sky, ITN's minority shareholdings are seen by many as putting it at a disadvantage.

Then there's the question of whether the ban on religious groups owning a broadcasting licence will be lifted. Perhaps the spectre of Pat Robertson, the extreme right-wing American evangelist who owns a TV network in the US, has dissuaded the Government from relaxing this restriction. But the Lords contains a powerful group of potential rebels: "The bishops are quite exercised," says Mr Whittingdale. And in the UK, religious opinion tends to be at the other end of the political spectrum to Mr Robertson. So watch out: the Rowan Williams Channel may soon be coming to a screen near you.